Employer Pays Under 55p a Mile? Claim the Gap

You drive your own car between clients: home care visits, community nursing rounds, sales calls, site inspections. Your employer pays you 30p or 35p a mile. Then you hear that HMRC's approved rate went up to 55p in April, and your payslip hasn't changed. Is that 20p to 25p a mile simply lost?

No. You can claim tax relief on the gap. It's called Mileage Allowance Relief. You work out what HMRC's approved rates would have paid for your business miles in the tax year (55p a mile for the first 10,000 miles in 2026–27, then 25p), take away what your employer actually paid you, and HMRC gives you tax relief on the difference at your income tax rate. If your total claim for job expenses is £2,500 or less in a tax year, you can claim online or on a P87 form without filing a tax return. You'll need to send a mileage log that shows the reason for every journey and the postcodes where each one started and ended. You can go back four tax years.

The rates, and the April 2026 change

HMRC's approved mileage allowance payment (AMAP) rates are the most an employer can pay you per business mile without it counting as taxable pay. They also set the ceiling for your relief claim.

Vehicle	2026–27 (from 6 April 2026)	Before 6 April 2026
Car or van, first 10,000 business miles	55p	45p
Car or van, each mile over 10,000	25p	25p
Motorcycle	24p	24p
Bicycle	20p	20p

The UK tax year runs from 6 April to 5 April, and the 10,000-mile threshold starts again on 6 April. The rate change landed on that date too, so a claim for 2025–26 is worked out at 45p, and a claim for 2026–27 at 55p. You can't use the new rate for miles you drove before April.

Working out your claim

There are three steps:

1. Approved amount: your business miles for the tax year at the approved rates.
2. Take away everything your employer paid you for those miles.
3. Relief is that difference multiplied by your highest rate of income tax. The difference is the amount you claim. What you actually get back is the tax on it.

Situation	Approved	Paid	Claim	Relief at 20%
6,000 mi in 2025–26 at 30p	£2,700 (45p)	£1,800	£900	£180
6,000 mi in 2026–27 at 30p	£3,300 (55p)	£1,800	£1,500	£300
12,000 mi in 2026–27 at 30p	£6,000 (10,000 × 55p + 2,000 × 25p)	£3,600	£2,400	£480
8,000 mi in 2026–27, no mileage pay	£4,400	£0	£4,400	£880

Look at the last two rows. Past 10,000 miles, a 30p payment is already more than the 25p approved rate, so those extra miles shrink the gap. With no mileage pay at all, the claim is over £2,500, which changes how you have to claim (see below). If you pay Scottish income tax, use your Scottish rate in step 3. Relief can't be more than the income tax you actually paid that year.

Which miles count

Only business journeys count. Ordinary commuting between home and your permanent workplace never does, even if your employer pays you for it. HMRC's travel guidance (booklet 490) gives two cases that cover most people:

• No normal workplace. If your work comes to you as a list of visits and you have no fixed base, HMRC's own example says relief covers “all” the business travel, “including from his home to his first appointment and from his last appointment to his home.” Many domiciliary care workers and mobile engineers work like this.
• A fixed base plus visits. If you start every day at the same office or hospital, getting there is commuting. The drives from there out to clients, and between clients, are business miles. Driving straight from home to a client (a “temporary workplace”) generally qualifies too.

The edge cases are real: patch-based roles, a base you visit only sometimes, a posting that runs longer than 24 months. Read chapters 2 and 3 of booklet 490, or ask an adviser, before you count those miles. The approved rates only apply to your own vehicle. With a company car you can't claim these rates, though you may be able to claim for fuel your employer hasn't covered.

How to claim

1. If you already file a Self Assessment return, you have to claim on it. Put it in the employment section of the return. You can't use the online form or P87 alongside it.
2. If your total claim for all job expenses is £2,500 or less for the tax year, claim through HMRC's online service (sign in with your Government Gateway account) or post a P87 form. The £2,500 is the amount you claim (step 2 above) added to any other job expenses, like professional fees, and not the relief you get back.
3. If it's more than £2,500, you have to file a Self Assessment return for that year.

Evidence: since 14 October 2024, HMRC asks you to send evidence with a PAYE expenses claim, online or by post. For mileage, that means “a copy of a mileage log for each employment” that includes “the reason for every journey and the postcodes for the start and finishing points.” A log without postcodes doesn’t meet that requirement, so add them before you send it.

How you get the money: a claim for the current year usually adjusts your tax code, so you pay slightly less tax on each payslip. A claim for an earlier year comes as a refund.

How far back: the current tax year and the four before it. As of September 2026, that means 2022–23 through 2026–27. You have until 5 April 2027 to claim for 2022–23. Each year uses its own rate: 45p for everything up to 5 April 2026.

Rebuilding past years

If you're claiming for 2023–24 or 2024–25 and never kept a log, you still need records. Rotas, visit schedules, the mileage claim forms you sent your employer, and the payslips that show what they paid you are the raw material. Your employer's expenses system probably already has the journeys you submitted, and the per-mile rate it paid. Rebuild the log from those, rather than from memory. Our guide to reconstructing a mileage log after the fact goes through that method step by step. It's written for US filers, but the method works the same way here.

Where TaxMiles helps, and where it doesn't

TaxMiles is our iPhone mileage tracker. When you set Settings → Tax Region to the United Kingdom, it values your business miles at HMRC's rates: 55p for trips from 6 April 2026, 45p before that, and 25p once you pass 10,000 miles in a tax year. The count starts again every 6 April. It records drives in the background, and you add a purpose to each trip. The purpose is included in the PDF and CSV export, which covers HMRC's “reason for every journey”.

Here's what it won't do for this claim:

• No postcodes on automatically detected trips. The app labels the start and end of each trip with a place name, town and county, not a postcode. After you export the CSV, add start and end postcode columns in a spreadsheet. For trips you enter by hand, the address is free text, so you can type the postcode in.
• No field for what your employer paid. The figure the app shows is the approved amount, step 1 above. Take your employer's payments off yourself, using your payslips.
• Dates in the CSV are month/day/year, US style. Watch for that if you open it in a UK spreadsheet.
• Cars and vans only. It doesn't use the motorcycle or bicycle rates. Its tax estimates use the UK-wide 20/40/45% rates, not Scottish ones.
• Free-tier limits. The free version tracks 40 trips a month and allows one export per tax year. Someone doing eight home visits a day will reach 40 trips in the first week, so a full-time mobile worker would need Pro, which is a subscription. The App Store shows you its price in pounds.

Who it isn't for: if your employer's rostering or expenses system already records every visit with postcodes and the rate it paid you, you probably have your evidence already. Export that instead. A paper log with the date, the reason, both postcodes and the miles is also fine. HMRC wants the information and doesn't care what you used to record it.

Your next step

Tonight, find two numbers: the per-mile rate on your employer's expenses policy or payslip, and how many business miles you've been paid for since 6 April. Multiply the miles by 55p minus your rate. That gives you roughly what you can claim for this year so far. If it's worth claiming, start logging postcodes from tomorrow, and pull together past years' rotas while your employer can still reissue them. HMRC's approved-rate figures are on the UK mileage allowance page, and how the UK, Canadian and Australian schemes compare explains why the 10,000-mile threshold catches people out.

Sources: GOV.UK: tax relief for vehicles you use for work · GOV.UK: mileage allowance payment rates · GOV.UK: claim by post (P87) · HMRC: evidence required for P87 claims · HMRC booklet 490, chapter 2 · booklet 490, chapter 3

This article is general information for UK employees, not tax advice. Rates, thresholds and HMRC's evidence rules change; check current GOV.UK guidance or ask a tax adviser about your own circumstances. TaxMiles, Cleanup My Phone, Trending Music and RecipeScan are our apps.